Government Decision to Safeguard Irish Banking System
Government Decision to Safeguard Irish Banking System
The Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II), with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as may be approved by Government following consultation with the Central Bank and the Financial Regulator. It has done so following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish Banking system. The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers’ interest can be protected. The guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on 29 September 2008, and will expire at midnight on 28 September 2010
Insert jokes about Dumb Irish Taxpayer in the comments.
9 comments:
It is not the Irish tax payer that foots this bill. I would be annoyed if I were a German dentist and I was seeing my wealth being directly transferred to spivvy Irish property developers.
Glad you liked the email!
The return we are looking for is having a financial system at all by the end of the week.
It's entirely possible that this moves allows Irish banks to make a fortune off the crisis. I'm curious to see whether one tiny country's guarantee is enough to relax interbank lending constraints -- at least in London.
My guess is that this will turn out to be very smart. Though I agree that I'm still wondering how a bunch of democratically elected government officials found the cojones to make such a bold move.
Well, who knows. They say, brits are moving their savings to Irish banks just now.
Its a great way of attracting very cheap non-wholesale funding into your banking system.
Can the Irish Govt meet its obligations if something does go wrong? Especially if the Irish economy is as feck'd as many seem to think
@anon 2:43
it's easy to make big bets with other people's cojones.
The DITs just found themselves in the monoline business, and I'll bet you dollars to doughnuts that the premiums will be derisory.
A Celtic tiger now with the dead meat conserved.
"If I were a German dentist": thanks for that, it made me laugh. Or was it just a veiled reference to Marathon Man?
More seriously, I was slightly concerned that the Irish government seemed to be guaranteeing about 4xGDP of assets. Can they do that credibly? Not to mention having to get the deal though the EU.
Phil
The Irish government might have to come good on their state guarantee.
Anglo Irish Bank
share price is on its way to Zero...
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